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Longmont's Pumphouse has to start from scratch

Liquor license had actually expired a month before it was discovered

By Tony KindelspireLongmont Times-Call

Posted:
01/03/2014 10:25:19 PM MST

Updated:
01/04/2014 10:08:03 AM MST

Few customers are dining at the Red Zone shortly after 5 p.m. Friday. The Pumphouse and Red Zone lost their liquor license due to a clerical error and will have to re-apply to serve again.
(
Matthew Jonas
)

It turns out that the liquor license for the Pumphouse/Red Zone had been expired for weeks before the restaurant and sports bar received official notification this week that it was required to stop selling alcohol.

But nobody realized it -- not the city, not the state and not the owners of the restaurant.

And because of state law, there's no quick process for getting its license back. In fact, in the eyes of the state, the owners of the 16-year-old establishment have to start from scratch and apply for a brand-new license.

The Colorado Department of Revenue sent the Pumphouse a notice in August telling it its annual liquor license was about to expire at the end of the month. State law allows an establishment a 90-day grace period in which to reapply. As long as it does within that 90 days, it remains in compliance with the law.

Dawn Quintana, deputy city clerk, said that Colorado retail establishments that sell liquor operate under a "dual authority." The business must first submit the renewal application and a check to the city, and if city approves the renewal it sends the application and payment on to the state.

But the Pumphouse's renewal application and payment never made it to the city clerk's office.

Mayor Dennis Coombs, one of the four owners of the Pumphouse/Red Zone, said Thursday it was the responsibility of one of his partners to take care of processing the application and cutting the check. It went undiscovered until this week that the check had been written but never been cashed. Meanwhile, the license and 90-day grace period had expired at the end of November.

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Routine check leads to discovery

Sometime during that grace period the city sent a reminder that the Pumphouse was into its 90-day grace period.

"We send out little reminder postcards," Quintana said. "I wouldn't put as much clout on it as an official renewal notice."

The deadline for renewal, meanwhile, came and went.

Then this week -- New Years Eve, to be exact -- Quintana ran a report to check the year-end status of liquor licenses in the city. That's when she discovered the Pumphouse was no longer in compliance.

Quintana said her office notified the Pumphouse on Tuesday that its license might have been expired but said it wanted to check with the Colorado Department of Revenue to make sure there hadn't been a mix-up. Because of the holiday, the earliest the clerk's office could talk to the state would be Thursday. When it did, it discovered that the Pumphouse was no longer in compliance with state law, and Thursday afternoon Pumphouse ownership was told it had to cease and desist selling alcohol immediately.

Quintana said the city has been trying to set up an automatic notification system that would alert the clerk's office to a pending liquor license expiration, but has had no luck getting the software to work. So she runs the reports manually, she said.

A sign informing customers that Pumphouse and Red Zone are unable to server beer or alcohol sits on the bar Friday.
(
Matthew Jonas
)

"We try and run them quarterly," Quintana said Friday. "I would say that based on this, we didn't do one in the previous quarter."

That report would have been produced in September, the same month the worst natural disaster in Longmont's history hit.

Starting from square one

The mystery remains in what happened to the check and the renewal form the Pumphouse submitted to the city. Coombs said his partner cut the check out of a little-used, manual checkbook the business uses only rarely, and because the account is used so rarely, no one -- until this week -- discovered that the renewal check had never been cashed.

Coombs said he believes his partner got distracted around the time he was to mail it, and said the individual feels awful about what happened.

Quintana said that by the time it became clear what had happened, it was too late for the Pumphouse to apply for renewal.

"The law states that you have to file your renewal prior to expiration. ... The law just doesn't allow for a simple remedy, unfortunately," she said.

State statutes are unambiguous about liquor license renewal, added Patrick Maroney, chief of investigations for the Colorado Department of Revenue.

"If they failed to renew within 90 days then they would have to apply for a new license," he said.

That is where the Pumphouse finds itself now. State law says the local licensing authority must hold a public hearing for any new liquor license applicant, and that hearing can be held no earlier than 30 days after an application is filed.

Maroney said a business may file for "concurrent review," which is where the state reviews an application during that 30-day period, essentially at the same time as the local authority is considering it.

"If you don't request a concurrent review, we don't even see the application until the city reviews it," he said.

In the case of the Pumphouse, a request for concurrent review has been filed and accepted, Maroney said, and given the unusual circumstances, the Department of Revenue is waiving the $100 fee it usually charges to initiate a concurrent review.

The concurrent review process means legally, the state could approve the Pumphouse's application right after the city does -- meaning the restaurant and sports bar could have its license back by early February.

"It all depends on our caseload as well, how many concurrent reviews we have in our queue," Maroney said.

He said he couldn't specifically say how many current applicants are asking for concurrent review, but he said it's not an uncommon request.

The Colorado Department of Revenue has four staff members to handle liquor licensing, Maroney said, and he estimated his office processes more than 12,000 applications of various types annually.

He said the Department of Revenue is "sensitive" to the Pumphouse's plight, given the unusual circumstances of the case and the fact that the business has a solid track record. But it also has to comply with state law.

"We will diligently work with the city to make sure it can get issued as soon as possible," Maroney said.

Coombs said the Pumphouse/Red Zone will continue to stay open and serve meals, but given the Red Zone's focus on sports he expects to see about a third of the revenue it would usually see.

The loss of the liquor license comes at a particularly painful time given the amount of sports happening this time of year, from college football bowl games to the NFL playoffs, and college and pro basketball and NHL action.

Coombs said layoffs of staff are likely to happen. He said he and his partners feel horrible for the mistake and that there's no one else to blame besides themselves.

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